The administration repeatedly has suggested that the negotiators were making progress.
In the announcement on Twitter, Trump said that talks to secure a trade deal with China are continuing, but are moving "too slowly".
He said, "The 10% will go up to 25% on Friday".
"More likely, in our view, is that this renewed threat is an attempt to extract a few more minor concessions in the final days of talks", he said. Trump also noted that $50 billion of hi-tech goods from China that are imported by the US already are taxed at 25%.
Investors were taking risk off the table on concerns that Trump's threat would halt progress in talks between the world's biggest economies, especially since some recent gains in USA equities were due to optimism they would reach a deal.
"The Tariffs paid to the United States of America have had little impact on product cost, mostly borne by China".
It is understood that key sticking points include how to police any deal, and whether existing tariffs will be removed or stay in place.
Israeli airstrikes kill two Hamas' fighters as protests in Gaza flare up
Rockets could be seen flying through the sky over the coastal city of Ashkelon, located about 12 kilometres from the Gaza Strip . Three people, including an elderly woman, were wounded Saturday by rocket fire, and dozens more were treated for shock.
Sunday's announcement comes ahead of continued trade discussions as Chinese Vice Premier Liu He is set to arrive Wednesday in Washington, D.C.
After easing losses for a while, US futures lost more ground and hit a fresh session low after the Wall Street Journal reported that China was considering cancelling a round of USA talks set for this week because of Trump's comments.
In the bilateral consultations, Washington and Beijing are trying to work out a mutually acceptable trade agreement that would put an end to an nearly year-long tariff war between the world's largest economies. But Trump and China's President Xi Jinping agreed in December to refrain from further escalation.
Bloomberg Economics chief economist Tom Orlik said: "It's possible talks are breaking down, with China offering insufficient concessions, and an increase in tariffs a genuine prospect".
The administration has been insisting on a mechanism to ensure that China follows through on any promises to purchase more American goods.
Both sides, representing the world's two biggest economies, have said progress is being made.
The S&P 500 has gained 17.5% so far this year partly due to a decision by the U.S. Federal Reserve to put rate hikes on hold but also due to hopes for a China deal.